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Mar 01, 2020 / 07:55

Vietnam plans to adjust electricity pricing to encourage efficiency

The new calculation would make it more expensive for customers who use more than 700 kWh per month.

Vietnam’s Ministry of Industry and Trade has proposed a list of electricity prices which is different from the current one and make it more expensive for customers using more than 700 kWh per month.

 Nguyen Anh Tuan, head of Electricity Regulatory Authority of Vietnam (ERAV) under the Ministry of Industry and Trade (MOIT). Photo: Vietnamplus

The proposal, which will be sent to authorized ministries and organizations for reference, will include five brackets (instead of six currently) between 0 and 100 kWh; 101-200 kWh; 201-400 kWh; 401-700 kWh; and more than 701 kWh.

The price will be respective VND1,549 (67 US cent)/kWh; VND1,858 (81 US cent)/kWh; VND2,340 (US$1) kWh; VND2,701 kWh (US$1.2); and VND3,105 (US$1.35) kWh.

Nguyen Anh Tuan, head of Electricity Regulatory Authority of Vietnam (ERAV) under the Ministry of Industry and Trade (MOIT), was quoted by local media as saying that the adjustment is aimed to apply the most suitable volume for the use of different customers without affecting the prices.

Commenting on the adjustment, Dr. Tran Dinh Long, vice president of the Vietnam Electrical Engineering Association (VEEA), said that the five-bracket scale is suitable for different kinds of customers. He supports the “use more pay more” policy.

Nguyen Tien Thoa, head of the Vietnam Valuation Association, said there should have a rate which encourages people to save electricity because power is not a limitless resource.

The latest power price hike in Vietnam took place in March 2019 with a rise of 8.36% to an average of VND1,864 (81 US cent)/kWh.

Vietnam Electricity (EVN), the country’s sole power distributor, is responsible for selling power to customers.

Currently, the prices are divided into four groups, including manufacturing sector, administration, businesses, and households. Of the categories, the rate for businesses is highest and lowest for the manufacturing sector.

In comparison with regional countries, the price of power for household use in Vietnam is 9.67 US cent/kWh compared to 9.34 US cents in Malaysia, 11 US cents in Indonesia, 12.7 US cents in Thailand, 15.6 US cents in the Philippines, and 16.73 US cents in Singapore.

 Electricity prices for household use in Vietnam and regional countries. Source: Tiasang. Chart: Linh Pham